Breedon targets fallout from Anglo American and Lafarge UK overlap

Published: 31 March, 2011

JERSEY: Breedon Aggregates will target assets that may have to be sold by Anglo American and Lafarge SA when the two rivals combine their UK operations.

Anglo American and Lafarge's £1.8b joint venture, announced in February, will likely have more than 50% of the building-material market in central and eastern England, says Breedon's chief executive, Simon Vivian.

"There will definitely have to be some divestments to make that joint venture work," he said, expecting several hundred million pounds worth of assets to be sold.

Breedon will likely face competition for any assets that Lafarge and Anglo American's Tarmac have to sell, Vivian says. For the time being, Breedon is considering smaller, family-owned acquisitions. The company has £25m to spend, and debt and equity could be used for larger purchases, Peter Tom, chairman, says.

The Office of Fair Trading has already influenced other building-material deals. Travis Perkins opted to sell stores in 20 local areas when it bought BSS Group to avoid being referred to a competition commission. Regulators are currently considering the acquisition by Kingspan Group of CRH's insulation division.

Breedon Aggregates, listed on the Alternative Investment Market on the London Stock Exchange, plans to grow through consolidation of the UK heavyside building materials sector. It is the largest independent operator in the UK aggregates sector after the five global majors, with 29 quarries, 19 asphalt plants and 27 concrete plants in England and Scotland.